The Loonie Bin: Mutual Fund? More like Commission Fund!

I remember when I was 18 and started putting money into an RRSP. We had a family “friend?” who was an advisor and he came over one night to set everything up. I told him how much I was going to contribute each month and he entered the figures in his laptop. I had no idea about investments and thought that since he was a friend of my parents that I could totally trust him; hell I went to school with his daughter from K-12. I should have known better when he started messing around with the interest rates. “Here’s how much you would have if you made 17% each year till you reached 60. I was blinded by ignorance and only saw the millions of dollars on the screen. I’m sure he made a lot of money from selling me junk funds.

Later on in my life I stopped paying the monthly contributions from my account and instead had them matched and deducted from my pay cheque by my employer. I was 23 and did not give and I quote, “two shits” about my retirement. I met with the advisor set up by my company and he put my money into some mutual fund that “Seemed to be doing well”. I agreed and never thought twice about it. Every year I would buy more mutual funds near tax time from my bank. The dealer… I mean “Investment Consultant” would sit me down and show me 10 different mutual funds that were deemed appropriate for me. I would take their word and sign for mutual funds that, in the end, made them a decent commission. They had seen me coming from a mile away…and thinking back I probably could have smelled the plastic from their newly formed name tag.(Words of wisdom; never go to a “Free” Advisor. They will only sell you what they want you to buy. Find a financial advisor that charges by the hour to get an honest, unbiased opinion.)

Fast forward 7 years and after getting married and buying my own place, I started actually opening statements and tracking my finances. I realized that after 12 years of investing, I should have way more money in my rrsp’s then I did. I learned about MER’s and how my mutual funds were being taken advantage of. These guys in suits were taking 2-3% of my hard earned retirement savings each year and all they had to do was make their measly quota. I read that it was as much as $1300 on a mutual fund with $55000 in it. That’s when I said to myself, ” I can do that for free and do a helluva a lot better job too!”

I started researching through the internet and found a few good blogs and sites chalk full of investment how-to. And then after clicking a link about dividend investing, my life took on a whole new meaning. I opened a discount trading account and started selling off all my mutual funds and started investing in the companies that were making money off of me all these years. Have at you!

I found something that I am passionate about. When I hear people talking about dividends I light up and chime right in. Although I am new to the whole investing world, I have learned so much in the past 6 months and everyday I learn something new. I’m like a sponge… an old, moldy sponge some would say. But a sponge non the less and I want to help others learn what I have learned. The hardest part is to get people to actually listen to me.

When I tell people that I started investing in dividend paying stocks the first thing they say is, “Sounds like a ponzi scheme to me!”. Buying solid companies with solid dividend growth is a proven strategy that actually does work. No fancy gimmicks; no pay and pray techniques. It just takes patience…. lots of patience and a cool head when markets go south. It doesn’t matter what the stock price is, it’s all about the dividend that gets deposited every 3 months… money you can actually see for yourself. And with strong dividend growth, you can actually stay ahead of inflation. Try that with a bond or GIC.

I wasted 12 years of prime investing time and there’s nothing that I can do about it. The only thing I can do is help others to help themselves and get the middleman out of their pockets.